CCPA Speaks Out: Pharmacy Groups Continue to Fight AMP Rule

JANUARY 01, 2008

Julie Khani and Charles Sewell

Ms. Khani and Mr. Sewell are copresidents
of the Coalition for Community
Pharmacy Action.

As the implementation deadline
on Average Manufacturers
Price (AMP) looms
closer, the legislative activity on Capitol
Hill reflects the urgency of this issue
for community pharmacy. Committee
chairmen in the House and Senate
have introduced legislation to adjust
the AMP system, which threatens to
force thousands of pharmacies from
the Medicaid program. More than 130
cosponsors support a bill that would
replace AMP altogether.

The Saving Our Community Pharmacies
Act (HR 3140), introduced by
Rep Nancy Boyda (D, KS), has attracted
131 bipartisan cosponsors. This would
replace the AMP system with Retail
Acquisition Cost based on actual pharmacy
invoices. Both bills call for
increased generic use in order to drive
program savings.

As it stands, the rule released in May
by the Centers for Medicare & Medicaid
Services (CMS) will deal a crippling blow
to community pharmacy. A staggering
$8.4 billion is to be hacked from community
pharmacy's generic-drug payments
over the next 5 years—an overall reduction
of 30% of pharmacy's Medicaid current
generic-drug reimbursement.

The possible consequences of this
decrease in reimbursement are alarming.
Pharmacies that fill a large number
of Medicaid prescriptions could be
forced to shorten hours, lay off employees,
and even close down completely—
all of which threaten patient
access to prescription drug care.

The Government Accountability Office
has reported that pharmacies will
be reimbursed at 36% below their cost
to purchase generic medicines, on
average. The study even questions the
use of AMP as a benchmark at all.

Inadequate reimbursement rates
reduce incentives for pharmacies to
dispense lower-cost generic medicines,
directly contradicting present efforts to
implement cost-saving measures in the
Medicaid program. For every 1% decrease
in generic dispensing, Medicaid
loses hundreds of millions of dollars. In
other words, CMS' proposed definition
for AMP will not simply hurt pharmacies
and the Medicaid patients that rely
on them; it could cost taxpayers billions
of dollars a year.

Community pharmacy has labored
tirelessly for a legislative solution to this
looming catastrophe. Both the National
Community Pharmacists Association
and the National Association of Chain
Drug Stores—along with numerous
other pharmacy groups—are lobbying
Congress and enlisting support from
key lawmakers.

The Coalition for Community
Pharmacy Action (CCPA) is an
alliance between the National
Association of Chain Drug Stores
(NACDS) and the National
Community Pharmacists
Association (NCPA), which
together represents more than
55,000 community pharmacies.
CCPA leverages the support,
effort, and infrastructure of
NACDS and NCPA while engaging
community pharmacy to participate
and advocate on issues
affecting the industry.

Congress must act to prevent these
devastating generic-drug cuts from
going into effect. The fight is not over,
and, more than ever, it is essential for
community pharmacy to get engaged.
Pharmacists should contact their elected
officials in Washington and request
that they cosponsor these bills. Patients
should be encouraged to do the same
to protect their access to community
pharmacy. They can personally invite
members of Congress to visit their pharmacy,
and they can submit opinion
pieces to their local newspapers—anything
to promote the message of increasing
generic use and patient access
to quality affordable medication.

The time to act is now. The future of
community pharmacy depends on your
support.